- Bitcoin’s halving cycles are losing steam as macro forces now play a bigger role in pricing.
- BTC’ has increasingly started to tracks inflation expectations, signaling its shift into a macro-sensitive asset.
Bitcoin’s [BTC] halving cycles have long been hailed as the spark behind every major bull run — predictable supply cuts triggering euphoric price climbs.
But this time feels different.
While past cycles delivered exponential gains, the current post-halving environment is marked by hesitation rather than hysteria.
The data doesn’t lie: returns are shrinking, volatility is muted, and something fundamental may be shifting beneath the surface.
Rather than reacting to supply shocks alone, Bitcoin now appears more sensitive to macroeconomic signals — particularly inflation expectations and central bank narratives.
This is Bitcoin’s new era: Where the halving still matters, but the market’s gaze is drifting — away from block rewards, and toward Jerome Powell’s press conferences.
Bitcoin’s halving highs keep shrinking
Each halving cycle once promised monumental gains. The first delivered a staggering 6,400% return. The second halving saw that number cut in half.
The third? A respectable but far more muted 1,200%.
And the current cycle, so far, has barely scraped past 100% — even as Bitcoin hit new all-time highs.
Source: IntoTheBlock
The math is clear: Bitcoin’s post-halving rallies are tapering off. But the implications go deeper.
This pattern suggests the market no longer reacts to halving supply shocks with the same blind euphoria.
With institutional players in the mix and macro headwinds swirling, Bitcoin is behaving less like a wild speculative asset and more like a maturing, macro-sensitive instrument.
In other words, the halving might still set the stage — reducing issuance and tightening supply — but it’s no longer the main act.
Today, Bitcoin’s price is increasingly tied to liquidity cycles, interest rate expectations, and broader economic signals.
If that sounds like Bitcoin is slowly being absorbed into the traditional financial system, it’s because it is. The shrinking returns may not signal weakness — but rather a shift in narrative.
Bitcoin is now dancing to a different beat
Now, let’s forget mining cycles for a moment. Bitcoin’s real rhythm may now be set by inflation expectations!
Recent data shows that BTC’s price increasingly mirrors the 5-year and 10-year breakeven inflation rates, which represent market forecasts for future inflation.
These BIRs are derived from the yield spread between nominal treasuries and TIPS, and they’ve become a crucial sentiment barometer.
Source: Alphractal
When BIR rises, it signals higher expected inflation, often leading investors to seek alternatives to fiat… cue Bitcoin’s appeal as a hedge.
Historically, BTC has been greatly detached from macro metrics. But since 2020, its price has tightly correlated with inflation expectations, reacting more to Powell’s tone than to hash rate halvings.
This alignment signals a maturing asset, one that’s increasingly part of broader economic recalibrations. In short: Bitcoin is growing up, and its sensitivity to the BIR proves it’s no longer immune to the central bank.
Bitcoin is evolving — Here’s why it matters
Bitcoin was meant to defy — created as a hedge against the failures of traditional finance and the threat of runaway inflation. But in 2025, its behavior tells a different story.
Instead of acting as a pure inflation hedge, Bitcoin has become increasingly sensitive to the very forces it once aimed to escape: Federal Reserve policy, liquidity cycles, and real interest rates.
This isn’t necessarily a contradiction. As institutional adoption has surged and macro-aware capital has flooded in, Bitcoin’s price action now echoes shifts in policy tone, not just mining mechanics or CPI prints.
Rate hikes dry up flows; non-aggressive pivots reignite them. It’s more reflexive, more entangled.
But this evolution raises complex questions: Can Bitcoin still be considered “digital gold” if its value fluctuates with the same macro levers that drive equities?
Or has it become a liquidity sponge; an asset that soaks up excess capital in easy-money regimes, only to retreat when real rates rise?
Its core hasn’t changed. But the market it trades in — and the way it’s priced — has. Bitcoin may still be a hedge, but it’s one that now listens closely to the Fed.
And that’s the price of maturity.
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